Enter ecommerce inputs
Use current performance data or forecast assumptions. When monthly churn is entered, it overrides the manual lifespan input.
Example data table
| Scenario | Revenue | Orders | Customers | Margin | Acquisition Cost | New Customers | LTV | CAC | LTV:CAC |
|---|---|---|---|---|---|---|---|---|---|
| Lean Growth | $68,000 | 1,650 | 1,120 | 58% | $11,500 | 380 | $190.76 | $30.26 | 6.30 |
| Balanced Scale | $125,000 | 2,800 | 1,750 | 62% | $26,200 | 520 | $198.75 | $50.38 | 3.95 |
| Aggressive Spend | $146,000 | 2,940 | 1,860 | 55% | $43,000 | 610 | $190.60 | $70.49 | 2.70 |
Use the table to benchmark your own customer economics or build target scenarios for acquisition planning.
Formula used
Primary equations
- Average Order Value: Total Revenue ÷ Total Orders
- Observed Purchase Frequency: Total Orders ÷ Unique Customers
- Total Acquisition Cost: Marketing + Sales + Agency + Discount Spend
- CAC: Total Acquisition Cost ÷ New Customers Acquired
Advanced outputs
- Lifespan from Churn: 1 ÷ Monthly Churn Rate
- Payback Months: CAC ÷ Annual Gross Profit per Customer × 12
- Allowable CAC: LTV ÷ Target Ratio
- Profit per Acquired Customer: LTV − CAC
This calculator uses gross-margin-adjusted LTV because revenue-based LTV alone often overstates what a business can safely spend on acquisition.
How to use this calculator
- Enter revenue, orders, and unique customers from the same reporting period.
- Use a realistic gross margin percentage after product and fulfillment costs.
- Enter either a manual customer lifespan or a monthly churn percentage.
- Add every acquisition-related expense you want included in blended CAC.
- Type the number of new customers acquired during that period.
- Set your target LTV:CAC ratio to compare current spend against your goal.
- Press calculate to display results above the form, then export to CSV or PDF if needed.
Frequently asked questions
1. What is a good LTV:CAC ratio for ecommerce?
Many teams aim for at least 3:1. Lower ratios can signal weak unit economics, while much higher ratios may suggest the business could scale faster with disciplined additional spend.
2. Why does this calculator use gross margin?
Gross margin converts customer revenue into contribution value. That gives a more realistic view of how much money is available to cover acquisition costs and generate profit.
3. Should discounts be included in CAC?
Yes, if discounts or credits were used mainly to win new customers. Including them creates a more complete blended CAC and avoids understating true acquisition expense.
4. What if I do not know customer lifespan?
Use monthly churn if available. The calculator converts churn into expected lifespan automatically. If neither exists, estimate lifespan from repeat purchasing history and retention cohorts.
5. Why might my ratio look strong but cash flow still feel tight?
A healthy LTV:CAC ratio does not guarantee fast recovery. Long payback periods can pressure working capital even when eventual lifetime economics are attractive.
6. Is observed purchase frequency always the best value?
Not always. Historic frequency may be distorted by seasonality, promotions, or short measurement windows. Forecast frequency can be better for budgeting and scenario planning.
7. What does allowable CAC mean?
Allowable CAC is the maximum acquisition cost that still supports your target LTV:CAC ratio. It helps set bidding limits, channel budgets, and offer thresholds.
8. Can I use this for channel-level analysis?
Yes. Run separate inputs for each paid channel, campaign group, marketplace, or audience segment. Comparing segment-level ratios often reveals where scaling is safest.